Kansas City home prices have not yet reached their low point according to a joint study from Moody’s and Fiserv. Kansas City home prices declined 1.3 percent between 3rd quarter 2008 and 3rd quarter 2009. The study predicts a further decline of 2.2 percent between 3rd quarter 2009 and 2010, and another 1.6 percent drop between 3rd quarter 2010 and2011.
Kansas City is not alone in this decline. The report indicates that all of our peer metros will also see some decline this year before showing signs of stability next year. Even though Kansas City’s housing prices appear to be stabilizing between the last two periods (-2.2 percent to -1.6 percent), the 1.6 percent decline will represent the greatest decline in values among the peer metros.
Among our peers, Minneapolis-St. Paul and Portland have seen the greatest drops in value. These declines are still tame compared to places like Miami, where prices will have dropped by a whopping 64 percent over the past three years.
Foreclosures continue to be the main cause for the declines. Foreclosure activity is expected to pick up in the spring, which will cause a flood of homes to enter the market, many at greatly reduced prices.
We have been looking for the housing market to stabilize and provide a steady foundation for a recovery for a while now. It is looking more and more like that will not happen anytime soon. Here in the Midwest, we can at least be thankful that our housing prices did not hyper-inflate as they did in many sunbelt states.
